Tectonic shifts in geopolitical scenarios often disrupt the economic status quo, redefining the contours of existing relationships. The world is witnessing one such phase where each country, irrespective of its position, has been forced to reimagine its policy priorities for enhanced prosperity and growth. India is in that boat, too, with its special trade partner, the United States of America.

Given the eccentricity of the current American administration, India's trade-linked export sectors today are confronting a dual challenge. A fragile, often understated and under-quantified informal economy (in our case, where more than 80% of the workforce is absorbed by the informal, unorganised space) is facing ever-escalating trade barriers with its largest trading partner, the US. The bilateral trade between these two nations is valued at $131.84 billion, with the US accounting for around 18% of India's total goods exports. The recent US tariffs on Indian exports threaten to exacerbate the structural fragilities that are inherent to India's informal and labour-intensive sectors.

While India's macroeconomic indicators indicate resilience to these trade barriers, with Q1 (April-June) FY26 GDP hitting a five-quarter high of 7.8%, India's microeconomic reality paints a different picture. The informal sector, which employs over 400 million workers, is shrinking, with employment in the informal manufacturing sector falling 9.3% in April-June compared to January-March, dragging down informal sector employment by 2.1% to 12.86 crore. The number of enterprises during the same period also shrunk by -4.7%. Despite headline growth figures signalling resilience, India's informal sector, which employs hundreds of millions, remains exposed to external shocks and structural weaknesses.

The Ambur-Ranipet belt by the Palar River is home to one of India's largest leather and tanning industries. The industry was booming until recently, when Trump's 50% tariffs on Indian goods hit. In the short time that has followed, over 50 of the 300 or so odd factories in Ambur have shut down. India's leather goods and non-leather........

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